The FBI is investigating plans to renovate Harborside Event Center as well as plans to construct a hotel next door to the event center. / Jack Hardman/news-press.com

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What the FBI is asking

• Conflict of interest issues arising from property ownership and government decisions/voting on city projects and proposals. • A complicated land deal involving the city and county over land for widening State Road 82. • If the firing of Harborside Event Center director Rose Rundle had anything to do with concerns over hotel development.

Focus of probe

• 2007: State Road 82 four-laning land acquisition • June 5: Rose Rundle fired • July 1: Email from chief assistant U.S. Attorney to Fort Myers city attorney • July 3: Second email from Waid to Alley • Monday: City Council agenda includes proposal to give Rundle a grievance hearing • July 22: Workshop scheduled to discuss progress on a deal to bring a hotel to downtown Fort Myers near Harborside

An FBI investigation into downtown Fort Myers redevelopment includes conflict of interest issues, according to an email sent by a federal prosecutor to the city attorney.

All six City Council members, along with the city manager, assistant manager, public works director and redevelopment director, were called in this week for questioning by Chief Assistant U.S. Attorney Nicole Waid and FBI agent Ryan Davis. Mayor Randy Henderson was not on the list for questioning.

In a July 3 email to City Attorney Grant Alley, Waid asks, “Also, did your office receive a legal opinion regarding conflict of interest issues arising from property ownership and government decisions/voting on city projects and proposals? If so, could we have a copy?”

The legal opinion wasn’t available from city officials Thursday, but city officials questioned by Waid and Davis said the subject came up.

City officials said they were asked in particular about plans to bring in a developer to build a hotel next to Harborside Event Center in downtown.

Don Paight, executive director of the Downtown Redevelopment Agency, said he was asked whether there were conflicts and that he responded: “Who owns property around the area (Harborside) was never a consideration in the process except city-owned property. I’m not sure planners even knew who owned what.”

Waid and Davis also asked questions about the process of putting the deal together, Paight said. “It was questions about hotel selections and Harborside improvements.”

Meanwhile, the investigation threatened to derail the city’s plans to rejuvenate its dormant convention business by sprucing up Harborside and bringing in a hotel nearby.

David Ong, president of Acquest Realty Group, the Bloomfield, Mich.-based development group hired by the city to help get a national hotel on city property near Harborside, said the probe could put the project on hold.

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Potential investors might decide to bow out because of uncertainty about what will happen, Ong said Thursday. “The last thing they want to do is walk into some kind of hornet’s nest.”

Ong said he still planned to make a presentation July 22 to city officials at a workshop on how a hotel deal might be structured, but that those plans could change.

Another issue that came up was the firing of Harborside manager Rose Rundle, who was let go June 5 after claims that she lived with a subordinate, allowed an employee to bring his child to work, and permitted employees to telecommute.

On advice of the city attorney, the City Council declined to give Rundle a grievance hearing to respond.

But Councilman Mike Flanders on Thursday introduced two agenda items for Monday’s council meeting: one to give Rundle a grievance hearing and the other to launch a council investigation on whether termination policies are being followed by city staff.

As word spread of the FBI probe, some of those affected said they were baffled by what was going on.

“We’re just totally mystified,” Ong said, adding that he hasn’t been contacted by federal officials. “Our relationship with the city is as transparent as could be. We have no knowledge of impropriety by anybody.”

Waid and Davis also asked city officials about land acquisition for a joint project by the city, Lee County and the state Department of Transportation to four-lane part of State Road 82.

City Public Works Director Saeed Kazimi was the point man for the city in the land deal. He said Thursday he was interviewed but declined on advice of his attorney to discuss what was said.

City Manager Billy Mitchell also said he was asked about the SR 82 widening.

“They wanted to know some of the details about the State Road 82 impact fee credit situation and an explanation was given,” he said. “I explained that the right of way that was needed for water retention and drainage was acquired by the city from the property owner and developer using impact fee credits.”

U.S. Attorney spokesman William Daniels issued a written statement Thursday saying that Waid “met with some city officials this week to discuss the priorities and resources of the federal government as partners in the community. During those discussions, various topics were discussed pertaining to the issues of each ward. Beyond that, I am unable to confirm or deny any investigation. The U.S. Attorney’s Office initiated the meetings, along with the FBI.”